For some time now, there has been a lot of talk about the state of global coffee production and the sharp rise in prices. But how concerning is the situation, really? Is coffee destined to become a luxury product instead of part of our daily lives? In this article, we examine what is actually happening as well as the outlook for everyone who roasts, serves, and drinks coffee every day.
Sharp rise in coffee prices
The price of coffee has more than doubled over the last year and more than tripled over the last five years. Very recently, the increases have been particularly sharp: prices climbed by 57% in four months up to the end of February.
First, a little background. The top three coffee-producing countries account for 63% of global production: Brazil (40%), Vietnam (16%), and Colombia (7%). Whatever happens in any of these countries – especially in Brazil – has a significant impact on coffee markets worldwide. However, these countries have all experienced major problems in recent years.
Difficult times for coffee producers
Each of these countries has fallen victim to extreme weather events that have disrupted production, whether it be excessive rainfall in Colombia, heavy frosts followed by abnormally hot and dry conditions in Brazil, or a delayed rainy season and above-average temperatures in Vietnam.
Furthermore, fertilizer prices skyrocketed following the Russian invasion of Ukraine, which limited the quantities used by farmers, leading to a further decline in yields.
Difficulties continue: in September of last year, Brazil was hit by its worst drought since records began 70 years ago, which will affect the 2025/2026 harvests. However, some positive trends are emerging. Large producers like FAF in Brazil are working with many farmers to implement agroforestry methods that would allow them to better withstand extreme weather conditions. Finally, prices seem to be stabilizing and have even fallen slightly in the last few weeks.
Increased demand for coffee
Alongside production difficulties, demand for coffee has increased significantly, particularly from countries that are not traditionally large coffee consumers but are becoming so. Leading this group is China, where consumption has tripled over the last ten years.
And there you have all the cocktail ingredients necessary to drive prices up…
Long-term coffee prices
A look at long-term price trends helps put all of this into perspective. Since the 1970s, there have been five or six significant peaks. Admittedly, the latest one is the highest in absolute terms. But in real terms, taking inflation into account, the price was much higher during the peaks of 1977 or 1997. The first takeaway, therefore, is that this is not the first time we have seen sharp price increases. No need to panic for now.
It is also worth noting that on many occasions in the past, the price of coffee has been so low that it was below the cost of production! This represents a catastrophic and unsustainable situation for farmers and means that at least part of the adjustment since 2020 was inevitable and necessary.
What about the price of roasted coffee?
But what has been the extent of this impact on all players in the specialty coffee sector?
It is estimated that specialty coffee represents about 5% of the coffee market in France. There is no single market price, so we cannot measure the increases exactly. Nevertheless, based on our experience, we would say it has risen by about 10% to 20% over the last year and 30% to 40% over the last five years – nothing like the increases for basic green (unroasted) coffee. In fact, at The Stray Bean, other price increases have been more problematic over the last five years: 40% for milk, 70% for sugar, and 98% for chocolate!
Why haven't specialty coffee prices increased more? First, because specialty coffees have always cost more than basic coffees! Plantations are less intensive and farmers invest more time and resources to improve harvesting, drying, and sorting processes. Prices are slightly less tied to fluctuations in basic coffee markets than to other factors, such as labor costs. While these have also increased, the hikes have been less significant.
Let’s also not forget that a lot happens from the moment the coffee leaves the farm. It is shipped, roasted, distributed, ground, extracted, and served by, hopefully, an excellent barista in your favorite café! Green coffee is only one of the elements that make up the final product. Doubling its price will not double the price paid by the consumer.
One last thing: even when prices are high, as is currently the case, specialty coffee remains much cheaper than most other drinks. Buy a 250g bag of beans for €12 and you will get excellent coffee at home for a price, depending on the amount used, between 45 and 75 euro cents per cup! That is much cheaper than a glass of beer, wine, or soda.
Time to roast!
Our conclusion? Overall, we remain confident in the future of specialty coffee. Farming and transport are becoming greener and more sustainable, prices should remain very affordable for a long time to come, and there is enormous potential for growth. It still only represents 5% of the coffee market and more and more people are, rightly, looking for better quality.
All of this means that… we have some roasting to do!
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